Notice period when leaving employment

Below we discuss what your notice period means for you when you’re leaving your employment, plus practical tips and advice on how to deal with it.

See our page on How to resign from employment for an overview of resignation leading up to your notice period.

What does ‘notice period’ mean?

A notice period is the length of time following your dismissal or resignation that you have to work before you can officially leave your job. If your employer is giving you notice to leave, the notice period gives you time to complete and handover your work to someone else and also gives you time to seek alternative employment. 

If you are resigning and giving your employer notice of your intention to quit, they have time to make arrangements for your role and duties to be performed by someone else, so that the business may continue without being negatively affected by your departure.  

The amount of notice period required will depend on the length of time you have worked at the organisation, and what is stated in your contract of employment.

 

What’s the minimum notice period?

Contractual notice
The first thing to check when working out your notice period is your contract of employment. Small employers normally only give the minimum statutory right (which is explained below). Large employers, especially in the public sector, normally give more.

In some sectors, in particular education, notice periods may not be a fixed period of time but depend on when they’re given – a school won’t want a teacher leaving in the middle of the term.

If the employment contract is silent on notice period then a “reasonable” period will be implied into the contract. That is uncertain, and may be no longer than statutory notice.

Statutory notice

The law lays down minimum periods of notice that your employer must give if dismissing you. The period gets longer as you remain employed for longer.

If you’ve worked for an organisation for less than one month then neither you nor your employer has to give each other any notice at all.

If you have been employed between one month and two years the minimum notice period that you should give your employer if you’re resigning, or that they should give you if they are asking you to leave, is one week. 

If you’ve been employed longer than two years and you are resigning, then your minimum notice period remains one week (though most employment contracts give longer periods).

If your employer is giving you notice, and you have worked for them for over two years, then for every one year of service, you are entitled to one week’s notice. This is capped at a maximum of 12 years. 

For example, if you work for the same company for 7 years you would be entitled to 7 weeks’ notice. If you have been employed for 15 years, the maximum amount of notice you are entitled to is 12 weeks (because of the cap mentioned above).

However, there is an exception to this rule: if an employee is dismissed without notice (referred to as a summary dismissal) this would mean no notice is served at all.

An employer has the right to terminate your employment contract without notice, immediately, in cases of gross misconduct such as severe bullying, theft, violence or revealing sensitive information to another party without authorisation.

That amounts to a fundamental breach of contract and so the employer can choose to bring the contract to an end without giving notice. (Similarly, if your employer fundamentally breaches the contract, you can resign without notice.)

 

Is a notice period legally binding?

A notice period, if applied correctly to the length of time you have worked for the organisation, is legally binding.

You might want to leave your job before you’ve worked your full notice period, in which case the best thing to do is to make an informal approach to your employer about it. You may be able to come to an alternative arrangement that suits both parties.

Whilst you could leave your job without working your full notice period, you might be in breach of contract if you did so without your employer’s written agreement.  If this happened, your employer wouldn’t be required to pay your notice pay and they could also take legal action against you for breaching your contract.

What pay and conditions should you get during your notice period?

Once you’ve formally resigned, and during your notice period, you should receive your usual pay, sick pay and other entitlements to pay (including maternity pay where applicable).

You would normally be expected to continue with your role during your notice period unless your employer wanted you not to. 

Some reasons why your employer might not want you to continue as usual could include the negative effect on staff morale of your leaving or wanting to remove your access to confidential and/or commercially sensitive information, especially if you were leaving for a new job in the same sector.

If that was the case, your employer might want you to stop work before you have served your notice period and put you on one of the types of scheme outlined below until your notice period has ended.

 

Garden leave during your notice period

You can be put on garden leave (aka gardening leave) after you have resigned with notice. Employers can use garden leave if they want to keep you away from the business before you officially leave their employment.  

Garden leave may include some restrictions such as not being permitted to maintain contact with colleagues or clients. These restrictions will vary at the discretion of the employer and you should be informed of them in writing before being put on garden leave. 

There are several reasons why an organisation might want to place you on garden leave, some of which are mentioned above and also discussed further in our guide on Garden Leave.

 

Payment in lieu of notice (PILON)

PILON is when your employer pays your full salary, and potentially any benefits, for your notice period, but you do not have to work during the notice. 

For example, if you have a one month notice period stated in your contract, your employer may decide they want you to leave the organisation straight away. Under PILON, they would pay your salary/wage for the one month notice period, but you wouldn’t have to work during that period.

It could be something your employer may wish to initiate, or it could be something you suggest to them.

PILON is an option with some but not all employers: it depends largely on the individual circumstances of the organisation. It tends to be used most commonly when an employee leaves a company after there has been a dispute, as the employer may not want the staff member to return to the workplace.

See our guide on PILON for further information

 

Holidays during your notice period

What you can and can’t do with respect to taking holidays during your notice period is often more complex than you might at first think.  (Your employer also has rights during this period.) So below we explain what choices you have and what requirements your employer can place on you with respect to holidays during this period.

Can you choose to take your holiday as part of your notice period?

You have the option to take holiday during your notice period, as long as you have enough accrued days left, and your employer authorises it. The usual holiday request procedures normally apply.

If authorised, your holiday leave will be paid at your normal rate. If you have any accrued holiday entitlement (up to 28 days) that has not been used by the time you leave the company, you will also be paid for this.

If an employer refuses your request, it must be for a valid business reason.

Can your employer require you to take holidays during your notice period?

Your employer has the right to require you to use up any outstanding accrued holiday during your notice period. However, the employer must give you enough advance notice before requiring you to take this leave, unless your employment contract says otherwise.

The notice period they give you should be at least double the number of holiday days they want you to take. For example, if you have three days holiday remaining and your employer wants you to take all of it, they must give you at least six days’ notice. If you have 5 days remaining, it would be 10 days’ notice and so on.

Can you be suspended instead of working your notice period?

You cannot be suspended as an alternative to working your notice period.

During any period of suspension, you would not be at work and would usually be on full pay, but suspension should only be enacted in specific circumstances. For example, if you are being investigated for misconduct, or for health and safety reasons (such as your having been in contact with someone who has Covid-19).

Suspension should not be seen as disciplinary action, but rather as a period of time for deciding on disciplinary action.

 

What happens if you are off sick during your notice period?

If you are off sick during your notice period you are still usually entitled to your normal rate of pay during this period. As an example, if you have worked for an organisation for 5 years and handed in your notice, your contract could state that you have a 5 week notice period to serve. If you fall ill during this entire period you are still entitled to full pay for its duration. See also our separate guide on sick pay in your notice period for further information

 

What notice pay should you get?

Statutory notice pay

If you are dismissed from your job your employer must ensure you receive your usual pay during your notice period, even if your contract states a lesser amount.
Anyone working on a zero-hours contract who is deemed to be an employee should also receive statutory notice pay, although this doesn’t apply to people on zero-hours contracts who are categorised as workers. (See article by Bright HR for more detail.)

What can your employer do if you stop working before your notice period ends?

There are several steps your employer could take if you refused to work or stopped working before the end of your notice period without their agreement. Equally, there are some things they can’t do, although they might threaten to do them.  A few of these potential actions are discussed here.

Can your employer refuse to give you a reference if you don’t work your notice period?

Although it’s regarded as good practice to provide a reference for employees who are leaving or have already left, employers are usually under no legal obligation to provide a reference. They could therefore decide to withhold a reference unless you cooperated with them over your notice period.

There are one or two exceptions to this general rule. They include 

• Any written undertaking on the part of your employer to provide a reference when you leave. If such an undertaking existed, it would typically be included in your contract of employment.
• Requirements placed on your employer to provide a reference if you work in an industry regulated by the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA). Special rules apply to the provision of ‘regulatory references’ that were introduced a few years ago to try to improve standards in these sectors.
• If an employment reference is provided it must be accurate and fair: you may sue if it’s not. Similarly, your future employer may sue the reference provider if the reference was falsely positive. In order to ensure that their references are accurate and fair and to avoid being taken to court, many companies nowadays only provide minimal information covering job title, salary and dates of employment.

(See also our guide on references in settlement agreements)

Can your employer withdraw Incentive plans or withhold share awards?

Your employer is unlikely to withdraw incentive plan payments or share awards simply because you failed to work your notice period in full.  It is much more complex than that!

Generally speaking, contractual rights related to shares and incentive plans will vary depending on contract terms and how long you have been employed by a company.

For example, if you have vested share stock options (shares that you could already have purchased at a fixed price) then your rights to these cannot usually be rescinded.

On the other hand, if the options are not vested (shares that would have been available to buy at a future fixed date.

This can be more difficult if you have failed to honour your notice period commitment, although can often still be negotiated as part of any severance package agreement you may draw up with the company.

See also our guide on Share options in settlement severance packages for further information.

Are you entitled to your bonus after you give notice?

You may or may not be entitled to your bonus, depending on the type of bonus you are expecting and how you left the company and what your contract says.

If you have been dismissed for gross misconduct, you may find it difficult to secure any outstanding bonuses you were due. Where this type of dismissal is challenged legally and changed to unfair dismissal, for example, the ex-employee may be able to claim the bonus as loss of earnings.

However, contracts of employment will often state that in order to receive a bonus you must still be in employment at the time of it being issued, or that you must not be working your notice. This may make it more difficult for you to get the bonus you believe is due to you.

See our guide on Bonuses in employment termination packages for further detail.

 

Next steps

If you would like a no-obligation consultation about your notice period, contact Monaco Solicitors today

• via our website here 
• phone 020 7717 5259 
• email: communications@monacosolicitors.co.uk. 

We are specialist employment solicitors who only represent employees (not employers) and we understand only too well the issues and pitfalls that can arise if you want to negotiate around the issue of your notice period.